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Tesla has voiced strong opposition to a Republican-backed megabill that seeks to slash clean energy tax credits, a sentiment echoed by CEO Elon Musk shortly after he announced his departure from the Trump administration. Tesla Energy, the company’s solar and battery division, conveyed its disapproval on social media platform X, emphasizing that the abrupt termination of energy tax credits could jeopardize America's energy independence and the stability of the power grid.

The House-approved reconciliation package proposes the repeal of the Inflation Reduction Act's residential solar credits by the end of the year. Furthermore, it aims to rapidly phase out the clean electricity investment credit, sparing only nuclear generation while disqualifying the majority of other projects that are ready to commence. Additionally, the bill seeks to end most electric vehicle credits, affecting Tesla's eligibility for a $7,500 incentive at a time when the company faces declining sales and backlash from Musk’s federal workforce cuts.

In recent years, Tesla's energy division, established in 2015, has outperformed the vehicle segment in terms of growth and profitability. Specializing in solar and battery energy storage products, Tesla Energy supplies both residential customers and utility companies. The division has advocated for a "sensible wind down" of the residential solar credits and clean electricity investment credits to sustain the deployment rate of over 60 gigawatts per year, supporting AI and domestic manufacturing growth.

Musk amplified Tesla Energy's message on his personal X account, sharing a post that called the reduction of solar energy credits "unjust." He pointed out that while tax incentives for oil and gas remain untouched, those for electric vehicles and solar energy are being slashed. Musk, who announced last month that he would step back from his government role to focus more on Tesla, confirmed that his tenure as a "special government employee" was concluding.

This stance marks a shift for Musk, who has previously called for the elimination of all government subsidies, including for electric vehicles and the fossil fuel industry. He has argued that removing the EV credit would benefit Tesla, as competitors rely on it more heavily.

The oil industry, for its part, refutes claims that its tax breaks are subsidies, asserting they are consistent with the deductions available to all corporate taxpayers. Earlier this week, Musk also criticized the megabill for its hefty price tag, expressing his disappointment that it escalates the deficit, countering the cost-cutting initiatives of his Department of Government Efficiency.